Spotify Signs Kobalt Licensing Deal for AI Fan-Made Covers and Remixes
Spotify has signed a licensing agreement with Kobalt for its upcoming AI-powered covers and remixes tool, the company announced on its official newsroom on August 13 (Spotify Newsroom). The deal lets fans create their own covers and remixes of songs from Kobalt's publishing catalogue — and, according to Spotify, creates an additional source of income for participating songwriters.
Kobalt is a music publishing company, which means it represents songwriters and administers the rights to their compositions — the underlying music and lyrics, as distinct from any particular recording. The agreement is Spotify's first for the AI tool with a publisher outside of Universal Music Group, which signed on in May covering both recorded music and publishing (Music Business Worldwide). Spotify also reached a licensing deal with Merlin — a digital rights agency representing independent labels — announced on August 4.
The tool, described by Spotify and Universal in May as "powered by generative AI technology," will launch as a paid add-on for Spotify Premium subscribers. Spotify's press release says it will introduce "a creation model where songwriters and artists can directly share in the value generated through licensed covers and remixes on Spotify." In other words, when a fan uses AI to remix a song, the original songwriters and artists behind that song would earn money from the activity.
Spotify Co-CEO Alex Norström outlined the company's consent framework for the tool on its Q2 2026 earnings call on August 4, calling it the "3 Cs." Charlie Hellman, Spotify's SVP and Global Head of Music, and Laurent Hubert, CEO of Kobalt, are the executives associated with the agreement as reported by Music Business Worldwide.
For context on Spotify's scale: the company expects 788 million monthly active users in the third quarter of 2026 (Reuters). That is the audience a paid AI remix add-on would reach, assuming a portion of Premium subscribers opt in.
The deal sequence — Universal in May, Merlin on August 4, Kobalt on August 13 — shows Spotify methodically assembling the licensing groundwork before the tool reaches consumers. Each agreement covers a different layer of the music ecosystem: a major label and publisher, a collective of independents, and now a standalone publishing administrator. For fans, the promise is a new way to engage with songs they already stream. For songwriters, the pitch is straightforward — a royalty stream that did not exist before.
